As I noted previously, prescription drugs cost much more in the U.S. than everywhere else in the world. Yes, yes, I know, the drug companies say they need to recoup the high costs of research, development, and clinical trials, so the U.S. is subsidizing that for everyone else. I'll get around to why that's a crock, but first let's deal with the fact of high prices.
As we learned last time, drug makers have a period of patent protection and then additional "marketing exclusivity" after their drugs are approved by the FDA. During that period, they have no competition, and they can charge as much as they think they can get. However, other wealthy countries have a single authority that negotiates with the pharmaceutical companies and sets a price. They do an analysis of the benefits of a new drug compared with what is already on the market, and if the price the companies want is too high, they just say no. Here, we have thousands of health plans trying to buy drugs and they just don't have the clout to drive any kind of a bargain.
Medicare was actually forbidden to negotiate with drug companies at all until last year -- they just had to pay whatever the companies demanded. The 2022 Inflation Reduction Act allows Medicare to negotiate for the prices of 10 drugs, but that's barely going to make a dent.
More to come.
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